✉news BusinessPersonal Finance first seen 3 d ago, last 3 d ago, peak #32

Roth Conversions Can Keep Social Security Benefits Tax-Free

Original: The Social Security Tax Formula Counts Every Dollar From a Traditional IRA and Zero From a Roth. Convert Before You Claim and Up to $10,000 a Year of Benefits Stays Off the Return

A personal finance analysis points out that withdrawals from a traditional IRA count as income in the formula that determines whether Social Security benefits are taxed, while Roth withdrawals do not. The argument is that converting a traditional IRA to a Roth before claiming benefits can keep up to $10,000 a year of Social Security income off a retiree's tax return, reducing total retirement taxes.

Why now: Retirees weighing when to claim benefits are looking for ways to lower their tax bills.

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Evidence

• The Social Security Tax Formula Counts Every Dollar From a Traditional IRA and Zero From a Roth. Convert Before You Claim and Up to $10,000 a Year of Benefits Stays Off the Return · 24/7 Wall St.

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